Yahoo Finance Why Is Dycom Industries (DY) Down 5.9% Since Last Earnings Report?
It has been about a month since the last earnings report for Dycom Industries (DY). Shares have lost about 5.9% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Dycom Industries due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
Dycom's Q1 Earnings & Revenues Top Estimates
Dycom Industries Inc. reported strong results for first-quarter fiscal 2025 (ended Apr 27, 2024). Both the top and bottom lines surpassed their respective Zacks Consensus Estimate. Contract revenues and earnings increased on a year-over-year basis.
Notably, in May, the company acquired a telecommunications construction contractor that will expand its geographic footprint in Alaska.
Earnings & Revenue Discussion
Dycom reported adjusted earnings per share (EPS) of $2.12, which beat the Zacks Consensus Estimate of $1.39 by 52.5% and increased 22.5% from $1.73 year over year.
Contract revenues of $1.14 million surpassed the consensus mark of $1.09 million by 4.8% and grew 9.3% year over year. Contract revenues rose 2.5% on an organic basis. Acquisitions contributed $71.2 million to contract revenues.
The company’s top five customers contributed 56.4% to total contract revenues, which inched up marginally, organically. Revenues from all other customers increased 5.7% organically in the quarter. The quarter marks the 21st consecutive period of organic growth for DY’s all other customers in aggregate, excluding the top five.
Dycom’s largest customer, AT&T, contributed 21.5% to total revenues. Lumen (the second-largest customer) contributed 13% to total revenues and rallied 15% organically. Comcast contributed 11.5%, Verizon represented 9.6% and Charter added 2.1% to total revenues. Charter was up 121.8% year over year on an organic basis.
Fiber construction revenues from electric utilities were $96 million.
Operations & Backlog Details
Adjusted EBITDA increased 15.3% to $130.9 million from $113.5 million reported a year ago. Adjusted EBITDA margin of 11.5% expanded 60 basis points from the year-ago level.
Dycom’s backlog at the end of the fiscal first quarter totaled $6.364 billion compared with $6.917 billion at the fiscal 2024-end. Of the backlog, $3.863 billion is projected to be completed in the next 12 months.
Financials
As of Apr 27, 2024, Dycom had liquidity of $573.6 million, including cash and cash equivalents worth $26.1 million compared with $101.1 million as of Jan 27, 2024. Long-term debt was $842.4 million at the fiscal first-quarter end, up from $791.4 million at the fiscal 2024-end.
At the end of the fiscal first quarter, DY repurchased 210,000 shares of its common stock for $29.8 million at an average price of $141.84 per share.
Fiscal Second-Quarter View
For the fiscal second quarter (ending on Jul 27, 2024), DY expects contract revenues to grow by high-single digits year over year. It expects $70 million of acquired contract revenues for the quarter.
The adjusted EBITDA margin is expected to increase 25-75 bps from the year-ago levels. For the said period, Dycom expects the effective tax rate to be 26.5% and diluted shares of 29.4 million. Interest expenses, net, is likely to be $14.9 million and amortization expenses to be $6 million.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in fresh estimates.
The consensus estimate has shifted 13.56% due to these changes.
VGM Scores
Currently, Dycom Industries has an average Growth Score of C, however its Momentum Score is doing a lot better with an A. However, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Dycom Industries has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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